The U.S. Department of Education recently announced that, effective May 5 2025, it will resume collections of defaulted federal student loans. The department says there are 42.7 million borrowers that owe more than $1.6 trillion in student debt as well as over 5 million borrowers have not made a monthly payment in over 360 days and sit in default. In addition, they say there could be almost 10 million borrowers in default in a few months. Indeed…
“The U.S. Department of Education today announced its Office of Federal Student Aid (FSA) will resume collections of its defaulted federal student loan portfolio on Monday, May 5th. The Department has not collected on defaulted loans since March 2020. Resuming collections protects taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education. This initiative will be paired with a comprehensive communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.” – U.S. Dept. of Education
Click here to read the full release at the U.S. Department of Education.
